As Expected, Bill Introduced To Outlaw Tiered Bandwidth Pricing

from the this-won't-go-far dept

As was widely expected, Rep. Eric Massa has introduced a bill that would outlaw metered billing and create a bunch of other regulatory hoops ISPs need to jump through on pricing plans. We're no fans of metered broadband by any stretch of the imagination. It stifles innovation and limits the usefulness of the internet. Contrary to what some broadband providers will claim, it's not at all necessary and has nothing to do with preventing the network from being overrun or to stop part-time users from "subsidizing" everyone else. The Broadband Reports link above walks through how silly each of those arguments are. It also explains why this is a pure money grab. Flat-rate pricing has been quite profitable for the providers, but they want more. Note that nowhere in these usage plans do they talk about cheaper tiers. Beyond just being about a straight money grab, part of the desire is to use this to reduce competition for online video by making it more expensive for anyone other than the ISP to deliver video services.

That said... this bill seems laughable and is unlikely to go anywhere. The real issue here (as it has been all along) is the lack of meaningful competition in the broadband space. Get meaningful competition into the market, and this whole issue goes away. But that's not what Massa's bill does. It just adds regulatory burdens to ISPs without doing much to get at the root of the issue.

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  1. identicon
    Kazi, 18 Jun 2009 @ 11:02am

    I actually sort of agree with bandwidth caps - but provide it as an alternative. basicaly, you buy a SLA agreement and are guaranteed a certain bandwidth at all times of the day - that means the pipe is clean for you to use anytime.

    I sort of hate cable where myself, my neighbors, and other share the same connection. When 5:00 p.m. comes around the internet crawls to a stop and othertimes its so slow becuase the neighbor's kid is doing his "excessive" file sharing.

    People should realize that bandwidth is like a highway. You can fit only X cars on the road at a certain amount of time. If you pay for a HOV or premium lane you have much better service.

    The same should apply for ISP's. People can buy the basic service where the bandwidth is allocated based on need in respect to the business model and where people pay based on a SLA where you are guaranteed X mbytes/sec or X gigabytes/sec.

    Furthermorek, wouldn't such a bill require ISP's to invest more in infrastructure? Isn't that good - even if it is mandated by the government? Wouldn't it mean that something is being done right this time around?

    Furthermore, there are so many ISP's that one doing metered pricing and not providing a quality service might actually make it competitively disadvantaged. Think AOL and a 200$ bill a month for 56k when doing metered pricing around 96-98. They clearly didn't see the market change from metered pricing to unlimited bandwidth usage pricing and lost a large user base to services such as Earthlink, etc.

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